The Republic of Seychelles has launched the world’s first Sovereign blue bond in order to support sustainable marine and fisheries project. The news comes ahead of the first-ever global conference on the blue economy, which is expected to hold at the end of November in Kenya.
“We are honoured to be the first nation to pioneer such a novel financing instrument. The blue bond, which is part of an initiative that combines public and private investment to mobilise resources for empowering local communities and businesses, will greatly assist Seychelles in achieving a transition to sustainable fisheries and safeguarding our oceans while we sustainably develop our blue economy,” said Vincent Meriton, vice-president of the Republic of Seychelles
The revenue made from the 10-year blue bond will be used to develop Seychelle’s aquatic economy which is also known as the blue economy. The projects will include expansion of areas that are protected by water as well as improving governance in the areas of fisheries.
Grants and loans to Seychelles fisher communities would be provided through the Blue Grants Fund and Blue Investment Fund, managed respectively by Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT) and the Development Bank of Seychelles (DBS). The ‘Blue Economy’ is an emerging concept which encourages better stewardship of our ocean or ‘blue’ resources.
Seychelles launched this financial instrument in order to further boost the blue economy. In Seychelles, the fisheries sector is the second most important industry after tourism as it employs about 17 percent of the population. Fish products also account for about 95 percent of the country’s exports.
The World Bank assisted Seychelles in developing this financial instrument and it has so far raised US$15million from international investors. The world bank also helped Seychelles in reaching out to the three investors Calvert Impact Capital, Nuveen, and Prudential. This launch also shows that countries can adopt this instrument in order to harness their capital markets for financing the sustainable use of marine resources.
“It is a powerful signal that investors are increasingly interested in supporting the sustainable management and development of our oceans for generations to come,” said Laura Tuck, vice-president of sustainable development at the World Bank.
According to a joint statement issued by the government of Seychelles and the World Bank, the blue bond is partially guaranteed by a US$5 million guarantee from the World Bank (IBRD) and further supported by a US$5 million concessional loan from the GEF which will partially cover interest payments for the bond. Proceeds from the bond will also contribute to the World Bank’s South West Indian Ocean Fisheries Governance and Shared Growth Program, which supports countries in the region to sustainably manage their fisheries and increase economic benefits from their fisheries sectors.